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With zero interest in smartphones, Nokia is betting big on VR and health

Nokia has had a turbulent few years. It has fallen from the king of smartphones, to a lowly position well behind companies like Samsung and LG that it used to trample.

It’s time for a shift in strategy.

After Microsoft bought the Finnish corporation’s mobile division in 2014, the company formed Nokia Technologies, its “advanced technology and licensing business.” As the division’s President Ramzi Haidamus tells Digital Trends, Nokia Technologies will “rekindle the innovation spirit” with a consumer side, and will fund its projects with its patent and brand licensing business.

Related: Poor Priv sales could spell the end of BlackBerry’s mobile division

Diving into virtual reality

What kinds of products will we see from Nokia Technologies? We’ve already seen one side of its strategy with Ozo, Nokia’s $60,000 virtual reality camera aimed at capturing the hearts and pockets of producers in Hollywood. Haidamus says Ozo has been doing quite well and is meeting expectations. The company is also partnering with several studios, notably Disney, to pump out virtual reality content.

“Digital media and virtual reality are very germane to who we were as a company as a mobile business,” Haidamus said in a phone interview. “Media on the phone was invented by Nokia — and this is yet another step or evolution towards the way people are connected to wonderful experiences. It’s virtual reality that’s going to make that connection more real, where we create more empathy between the storyteller and the consumer.”

“Digital media and virtual reality are very germane to who we were as a company as a mobile business.”

At the preview for Disney’s Alice Through The Looking Glass, Haidamus said the Ozo was used to capture the red carpet event.

“Every executive from Disney was there — it gives you a feel of how companies like Disney are starting to experiment with virtual reality with an eye towards a larger agenda,” he said.

And Nokia is open to partnering with anyone to advance its digital media strategy — whether it’s with Facebook’s Oculus or Google’s upcoming Daydream platform, and “anyone else who is interested in furthering the virtual reality market.” Haidamus says because it’s such a nascent market, the only way to grow it is through partnerships.

But a Nokia-branded VR headset is not out of the question. Haidamus says if the business takes the company all the way down to the consumer, “that’s exactly where we’ll go.”

“The Nokia brand certainly allows it and gives us that permission,” he said. “Right now, Ozo is definitely claiming the top of the pyramid in terms of quality, amazing experience, and we believe we can bring that cost down in different form factors to prosumers and eventually to the consumer.”

Investing in healthier, happier lives

The other half of the strategy leads with Nokia’s recent acquisition of Withings, a French connected-health tech company known for its fitness wearables. When Haidamus joined Nokia Technologies, he said he took a look at the company’s assets and found digital health to be at the “epicenter of a lot of innovation that was happening at the lab.” It was one of the few labs that did not turn over to Microsoft. That was the basis for the new strategy.

“Just like we did for 150 years, this is yet another chapter where we reinvent ourselves and get back into the market with the kind of products consumers have expected from us,” Haidamus said. “It’s with that mindset that we set out two years ago to create a new strategy for the company — a strategy that basically touched on some varying pain points in today’s’ world. One of them is the digital health market idea, that people need guidance to a happier life, a more fulfilling life.”

President Ramzi Haidamus

Nokia wants to do that by releasing a slew of products that will not only monitor your body, as most fitness trackers do, but also your environment in a “gentle, frictionless way.” The fastest way to go to market was the acquisition of Withings — and the digital health strategy has already kicked off with a new product launch from the French company — the Body Cardio, a scale that can give you the breakdown of your body composition, as well as pulse wave velocity.

Related: Nokia, Ericsson join Rivada Mercury in bid to build public safety broadband network

When we spoke to Haidamus, he said the company was still deliberating whether or not its new digital health products would be branded as Withings or Nokia.

“Withings has very deep expertise and brand recognition in digital health, and Nokia has very broad and worldwide recognition — it’s just a question of which of the two you want to put on the product,” he said. It looks like Withings polled better.

“Nokia has very broad and worldwide recognition.”

That says a lot, seeing as the acquisition is more of a “reverse takeover” in Haidamus’ own words. Co-founder and CEO of Withings Cédric Hutchings will come in with a team, “and they will end up driving and owning an entire digital health business throughout Nokia.”

Several product launches, including the Body Cardio, are on the road map for 2016 — some of which were already in the works before the company purchased Withings.

“Our goal is to really play into the environment and not only on body monitoring — meaning that a healthier life and a happy life is achieved by a healthy body, living in a healthy environment,” Haidamus said. “And by monitoring both is how you reach the future potential of where most people want to be — therefore the monitoring of a home or an office is going to be germane to our strategy.”

Nokia phones, anyone?

But what about reports about Nokia getting back into the mobile game? It’s a bit of a misnomer. HMD Global is a Finnish company that was founded this year, and many of its executives have strong ties to Nokia. Nokia selected HMD as its partner, allowing it to build phones and tablets under the Nokia brand name and via a contract with Foxconn. It’s a strict licensing partnership, but HMD has to follow Nokia’s design, and hardware guidelines.

Related: Microsoft is getting out of the low-end phone business once and for all

“It will keep the brand alive in the mobile space, but … we’re not going to be involved directly within the business nor providing technology into the phone,” Haidamus said. “So it will be a design that will be true to the spirit of Nokia, but not necessarily with Nokia technology inside.”

It’s predominantly a way for Nokia to keep the cash flowing in. That and its patent licensing business, which Haidamus says is a way to monetize more than 50 billion euros of research and development investments over two decades.

For those that want to see the return of Nokia-made phones, Haidamus shatters all hope: “We exited the business two years ago, and have no interest going back in.”

But if a phone is branded Nokia and follows the same design and hardware guidelines set by the company, will consumers be able to tell the difference if there’s no Nokia technology inside? We’ll have to wait and see what HMD Global comes up with to find out.

Either way, leaving smartphones behind is clear and conscious decision, an integral part of the strategy as it revolves around “reinventing Nokia,” as Haidamus repeatedly said.

“We have been reinventing ourselves for 150 years using this amazing brand,” he said. “We’re starting to focus on people’s happiness and health in a way that wasn’t possible before because the technology wasn’t possible before. You can expect some really surprising products in the next year or two directly from this company as we turn a new chapter.”